Markets are divided by using:
- WANTS: The benefits consumers expect to receive as a result of using your product and their motivation for buying the product and the purchasing habits.
- NEEDS: The particular use of the product as perceived by the consumer.
- Companies need to develop a favourable image of their company
- Companies need to continue selling more
- They need to continually introduce new and exciting products into the market
- Businesses need to build loyalty amongst their existing clientele
- They need to be able to make a profit
Smaller companies do not consider marketing, as some companies start exporting as a result of unplanned orders. This may lead to ignoring the importance of marketing communications. Communicating with your target market is your way of showcasing your product. A strategy that is not effectively and efficiently communicated cannot succeed. This is often a very expensive exercise and most companies find that unless they budget for this very carefully they will not enjoy the market success they hoped for. Firstly set about establishing what you hoped to achieve through your marketing endeavours.
- How you intend to attract the attention of potential buyers
- How you will create an interest in what you are offering
- How to build a demand for your product
Your potential buyers are determined by your segmentation while the positioning of your product will determine your message. You will have already established the segment (whom to talk to), the position (what to say), now you need to decide on the media that will carry this message to potential buyers. Here are some of the ways in which you can communicate with your target market.
- Using the product itself - sampling
- Through branding
- Demonstrating the product
- The Internet - Web site promotion
- Distribution of printed material
- Through mass media
- The name of the product
- The benefits of the product
- The strengths of your company
Participation at international trade events is an effective media for not only creating sales but also to obtaining valuable marketing information for your marketing strategy. Obtain the list of international trade events from TISA. They would also be in a position to supply details not only pertaining to the sponsored fairs - (National pavilions), but all international trade fairs which take place globally. Communications that are predominantly targeted at the final consumer are often referred to as the "pull strategy". The consumer is expected to pull the product from the channel. In the case of exporting, especially for an SME, pursuance of a pull strategy is more difficult and expensive. More practical ways of promoting your products include:
- Sampling of products - giving away products
- Campaigning in the target market
- Distribution of samples by mail (if appropriate)
The exporter must pay careful attention to the laws of each country in which he wishes to conduct business. The legal systems of different countries can be so complicated that is advisable to employ the services of a legal advisor who can advise you on trademark registration, patent registration and or company name registration.
Exporting is far more costly and difficult than most companies envisage. Marketing is very expensive as most of the costs are incurred in the intended target market. Packaging and transportation costs are also costly. The cost of production could also be higher as in some instances additional staff may have to be employed in order to meet the greater number of orders received. Larger quantities of raw materials would have to be purchased to meet the increased demand and this could serious effect cash flow. Therefore, trained competent staff are essential. There are many South African organisations that offer training in international trade procedures.
The distribution process includes, the physical handling and distribution of the goods, the change of ownership (title), and most importantly the buying and selling between the manufacturers and the middlemen and the middlemen and the customers. The exporter has to choose the correct channel to use in order to access the intended market. In most instances these issues are not very different from those encountered in the local market. In many instances, the use of a middleman is probably the first method many companies will employ for gaining entry into the international marketplace. The exporter relies on the expertise and infrastructure of the middleman to handle the entire export process. The middleman could be:
- A trading house
- An agent
- A distributor
- A commission agent
- An agent as a distributor
Incoterms define the risk, cost and responsibility for both the seller and the buyer in any international trade transaction with regards to the transportation of that order.